These are crazy times. Although it seems like more and more, we can put the repressive Covid days behind us, the aftermath and effects of it are still with us. No industry has gone untouched by Covid, and that includes the insurance industry, too.
You may have noticed that payments for your home insurance renewals have increased over the last year. Inflationary increases in construction materials and rising labor costs have resulted in higher replacement costs for homes and higher paid losses after a claim.
According to Germania Insurance, renewal premiums are averaging a 37% increase across the state of Texas (and are even higher in some areas).
Rate increases can be due to the following factors: increased dwelling values, additional coverages, increased claim activity due to an increase in weather events (hail, tornadoes, hurricanes, and ice are all examples), and as mentioned above the inflationary pricing of housing construction materials.
There are however a couple of different options for you to consider to bring your rates back down. First, you can look at tweaking any additional coverages you may have on your policy that maybe you could lower your coverage or even eliminate. An example: do you still need equipment breakdown coverage? Equipment breakdown insurance covers damages caused by covered internal forces, like power surges, electrical shorts, motor burnout, mechanical breakdowns, or operator error. When everyone was still working from home, this may have made sense for you, but, if you’ve now gone back to an office or a place of work or school, perhaps modifying or eliminating this coverage could positively impact your homeowners’ insurance.
Another option may be to look at increasing your deductibles. If you have a $1,000 deductible on your home insurance today, moving to $2,500 or $5,000, or 1% of the total value of your home could also help save you on your total home insurance cost.
And lastly, if you’ve received a notification of a major increase in your homeowner’s insurance, contact your insurance agent and ask him/her to shop around to see what coverages and rates might be available to you. We’re lucky in Texas to have a lot of A+ insurance carriers, so it never hurts to see if there’s someone else that can provide you the coverage you need at the price you want. If you’d like NDI to see what we can find for you, you can click here.